The American middle class, like the American economy in general, is ailing. Labor-force participation has hit a 35-year low.
Median household income is lower than it was five years ago. Only the top 5 percent of households have seen their incomes rise under President Obama.
Commuters are paying more than twice as much for gas as they were in 2008. Federal payouts for food stamps, unemployment insurance and disability insurance have reached unprecedented levels.
Meanwhile, the country is still running near-record budget deficits and is burdened by $17 trillion in aggregate debt. Yet the stock market is soaring.
How can we make sense of all this contradictory nonsense? Irony.
Mr. Obama promised to restore the middle class. In truth, he has enacted the very policies that have done it the most damage in years. That paradox may explain why his base of support remains the very rich and the very poor. Goldman Sachs, federal bureaucrats and aid recipients are helped in a way that the strapped hardware store owner, Starbucks barista and part-time welder are not.
For all the talk of infrastructure or stimulus, the latest $6 trillion in federal borrowing seems to have been wasted on bailing out insider banks and green companies, growing the federal workforce, regulating the private sector into stasis, and subsidizing those who are not working.
The Federal Reserve still keeps interest rates at near zero. That mostly helps Wall Street, where money flows madly in search of any sort of return.
Most real interest rates for consumer purchases somehow remain exorbitant. Banks obtain their money cheaply and lend it out expensively. No wonder that so many Wall Street and banking executives — Timothy F. Geithner, Jack Lew, Peter Orszag, Gene Sperling, Larry Summers — revolve in and out of the highest levels of this “no revolving door” administration.
Middle-class workers see little chance of retiring when their meager savings earn almost no interest, so they are apt to stay on the job longer. In circular fashion, their continuance only makes unemployment rates for young entry-level workers even worse.
Mr. Obama always threatened higher taxes on the well-off. He achieved that goal with a new 39.6 percent federal rate on upper incomes — well apart from state and payroll taxes. Yet such steep taxes do not much affect the superrich. Their income is often exempted through sophisticated tax-avoidance or, more often, earned through more lightly taxed capital gains.
Small employers in many states have no such recourse and now pay more than half their incomes in assorted federal, state and local taxes. Naturally, they are hiring fewer people and making fewer capital investments.
That greater tax hit might have been worth it had the new rates been part of a balanced-budget agreement like the Bill Clinton-Newt Gingrich deal of 1997 that froze spending levels and for a time stopped our ruinous borrowing.
Not this time. We end up with the worst of all worlds: once again a 39 percent top tax rate, but now with out-of-control federal spending and more multibillion-dollar budget deficits.
By virtually shutting down gas and oil leases on federal lands, the administration has declined the chance to create millions of new energy jobs and to lower fuel prices. For now, cheaper power bills and gasoline prices, and the creation of more jobs in energy, depend entirely on those who drill on private lands — despite, not because, of federal efforts.